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Richard Kinder's Brilliant Move

Kinder Morgan surprised investors, announcing that it would buy in its MLPs. Can its ploy create value?

After the $71 billion purchase of its two master limited partnerships, energy-infrastructure giant Kinder Morgan will emerge as one of the most richly priced companies in the Standard & Poor's 500—ahead of Google and comparable to Facebook.

The announcement last week that Kinder Morgan (ticker: KMI) would create a single company by purchasing Kinder Morgan Energy Partners (KMP) and El Paso Pipeline Partners (EPB) in a deal using mostly stock was applauded by investors, who pushed the shares up 15%, to $41.43; the...